Marginal Product of Labour Formula:
From: | To: |
The Marginal Product of Labour (MPL) measures the change in output resulting from employing an additional unit of labor while keeping all other inputs constant. It's a key concept in production theory and labor economics.
The calculator uses the MPL formula:
Where:
Explanation: The formula calculates how much additional output is produced by adding one more worker to the production process.
Details: Understanding MPL helps businesses determine optimal staffing levels, assess worker productivity, and make decisions about hiring additional employees.
Tips: Enter the change in output (in units) and the change in labor (in workers). Both values must be positive numbers.
Q1: What does a high MPL indicate?
A: A high MPL suggests that additional workers are significantly increasing output, indicating efficient use of labor.
Q2: What is diminishing marginal product?
A: This occurs when adding more workers leads to smaller increases in output, reflecting decreasing returns to labor.
Q3: How is MPL different from average product?
A: MPL measures the change from adding one worker, while average product is total output divided by total workers.
Q4: Can MPL be negative?
A: Yes, if adding workers actually decreases output (due to overcrowding or inefficiency), MPL becomes negative.
Q5: How does MPL relate to wages?
A: In competitive markets, wages tend to equal the value of the marginal product of labor.